On Friday investors again found themselves grappling with a pair of contradictory catalysts; both of which were powerful enough to drive the market.
On the negative side, chatter suggested that Greece’s parliament was starting to balk at additional austerity measures, a requirement for further aid from the EU.
Should Greece default on its debt, investors fear the ripple it could generate in European banks, and then banks around the world, could cause markets to completely freeze up.
But on the positive side, the latest economic data showed new orders for long-lasting U.S. manufactured products, known as durable goods, increased 1.9 percent in May after dropping 2.7 percent in April as bookings for transportation equipment rebounded strongly.
Considered a leading indicator, the data suggests underlying strength in the economy.
So -- with strong headwinds and tailwinds blowing down Wall Street investors remain squarely focussed on the technical action in the S&P, which once again tested a key level.
What should you be watching and how should you position?
Instant Insights with the Fast Money traders
Steve Grasso explains that 1263 – the 200-day moving average – is what traders on the floor are watching, very closely.
”We bounced off of that level on June 16th and then again on June 22nd” he says. ‘If we break below 1263 we could head all the way down to the 50-week moving average of 1235. However if we hold, the sentiment should become incrementally bullish.”
It seems Grasso’s bias is to the upside. He also reminds that July is historically a better month than June. If 1263 holds, he suggests nibbling at industrials.